650.150 Enjoining
establishment of certain franchises or relocation of existing dealership in
same market area; complaint; determination of good cause; when offer of new
franchise or relocated dealership required; notice to existing or former
dealerships; attorney fees

650.153 Liability
of franchisor for repair of motor vehicle that becomes inoperative prior to
sale to consumer

650.155 Liability
of manufacturer for damages to vehicles before delivery to carrier

650.005
Definitions for ORS 650.005 to 650.100. As used in ORS 650.005 to 650.100,
unless the context requires otherwise:

(1)
“Area franchise” means a contract or agreement between a franchisor and a
subfranchisor whereby the subfranchisor is granted the right, for a valuable
consideration, to sell or negotiate the sale of franchises in the name or on
behalf of the franchisor.

(2)
“Control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a person, whether
through the ownership of voting securities, by contract, or otherwise.

(3)
“Director” means Director of the Department of Consumer and Business Services.

(4)
“Franchise” means a contract or agreement, whether oral or written, by which:

(a)
A franchisee is granted the right to engage in the business of offering, selling
or distributing goods or services under a marketing plan or system prescribed
in substantial part by a franchisor;

(b)
The operation of the franchisee’s business pursuant to such plan or system is
substantially associated with the franchisor’s trademark, service mark, trade
name, logotype, advertising or other commercial symbol designating the
franchisor of such plan or system; and

(c)
The franchisee is required to give to the franchisor a valuable consideration
for the right to transact business pursuant to the plan or system. Payment for
trading stamps in itself is not consideration for the right to transact
business pursuant to a plan or system.

(5)
“Franchisee” means a person to whom a franchise is sold by a franchisor.

(6)
“Franchisor” means a person, including a subfranchisor, who sells a franchise
for $100 or more to a franchisee or subfranchisor.

(7)
“Offer” or “offer to sell” includes every attempt to offer to dispose of, or
solicitation of an offer to buy, a franchise or interest in a franchise for
value.

(8)
“Sale” or “sell” includes every contract or agreement of sale of, contract to
sell, or disposition of a franchise or interest in a franchise for value, but
does not include the renewal or extension of an existing franchise without any
material change in the terms thereof if there is no interruption in the
operation of the franchised business by the franchisee.

(9)
“Subfranchisor” means a person to whom an area franchise is sold by a
franchisor. [1973 c.509 §1; 1987 c.414 §77; 1993 c.744 §16]

650.010
Franchise sellers required to maintain books and records; filings with
director.
Every person who offers to sell a franchise in this state shall maintain a
complete set of books, records and accounts of any such sale and the
disposition of the proceeds thereof, and shall, at such times as the Director
of the Department of Consumer and Business Services may require, file in the
office of the director a report, stating the names of each person to whom a
franchise has been sold by the person filing the report, the amount of the
proceeds derived and the disposition. [1973 c.509 §3]

650.015
When franchise sale or offer for sale is made in this state. (1) A sale or
offer to sell a franchise is made in this state when an offer to sell is made
in this state, or an offer to buy is accepted in this state, or, if the
franchisee is domiciled in this state, the franchised business is or will be
operated in this state.

(2)
An offer to sell a franchise is made in this state when the offer either
originates from this state or is directed by the offeror to this state and
received at the place to which it is directed. An offer to sell is accepted in
this state when acceptance is communicated to the offeror in this state.
Acceptance is communicated to the offeror in this state when the offeree
directs it to the offeror in this state reasonably believing the offeror to be
in this state and it is received at the place to which it is directed.

(3)
An offer to sell a franchise is not made in this state merely because:

(a)
The publisher circulates or there is circulated on behalf of the publisher in
this state any bona fide newspaper or other publication of general, regular and
paid circulation outside this state during the past 12 months; or

(b)
A radio or television program originating outside this state is received in
this state. [1973 c.509 §2]

650.020
Liability of franchise seller; defenses; amount of recovery; attorney fees;
joint and several liability; limitation on action; indemnification of corporation;
right of contribution. (1) Any person who sells a franchise is liable as
provided in subsection (3) of this section to the franchisee if the seller:

(a)
Employs any device, scheme or artifice to defraud; or

(b)
Makes any untrue statement of a material fact or omits to state a material fact
necessary in order to make the statements made, in light of the circumstances
under which they were made, not misleading.

(2)
It shall be an affirmative defense to any action for legal or equitable
remedies brought under subsection (1) of this section if the franchisee knew of
the untruth or omission.

(3)
The franchisee may recover any amounts to which the franchisee would be
entitled upon an action for a rescission. Except as provided in subsection (4)
of this section, the court may award reasonable attorney fees to the prevailing
party in an action under this section.

(4)
The court may not award attorney fees to a prevailing defendant under the
provisions of subsection (3) of this section if the action under this section
is maintained as a class action pursuant to ORCP 32.

(5)
Every person who directly or indirectly controls a franchisor liable under
subsection (1) of this section, every partner, officer or director of the
franchisor, every person occupying a similar status or performing similar
functions, and every person who participates or materially aids in the sale of
a franchise is also liable jointly and severally to the same extent as the
franchisor, unless the nonseller did not know, and, in the exercise of
reasonable care, could not have known, of the existence of the facts on which
the liability is based.

(6)
An action may not be commenced under this section more than three years after
the sale.

(7)
A corporation which is liable under ORS 650.005 to 650.100 shall have a right
of indemnification against any of its principal executive officers, directors
and controlling persons whose willful violation of any provision of ORS 650.005
to 650.100 gave rise to the liability. All persons liable under ORS 650.005 to
650.100 shall have a right of contribution against all other persons similarly
liable, based upon each person’s proportionate share of the total liability,
except:

(a)
A person willfully misrepresenting or failing to disclose shall not have any
right of contribution against any other person guilty merely of a negligent
violation; and

(b)
A principal executive officer, director, or controlling person shall not have
any right of contribution against the corporation to which the person sustains
that relationship. [1973 c.509 §4; 1979 c.284 §185; 1995 c.696 §40]

(Administration)

650.050
Rules.
In accordance with this section and ORS chapter 183, the Director of the
Department of Consumer and Business Services may from time to time make, amend
and rescind such rules as are necessary to carry out the provisions of ORS
650.005 to 650.100. [1973 c.509 §5]

650.055
General duties and powers of director. The Director of the Department of
Consumer and Business Services may:

(1)
Undertake the investigations, including investigations outside this state, that
the director considers necessary to:

(a)
Determine whether a person:

(A)
Has failed to comply with ORS 650.010;

(B)
Has engaged in, is engaging in or is about to engage in an act or practice that
would give rise to liability under ORS 650.020; or

(C)
Has violated, is violating or is about to violate a rule of the director
adopted under ORS 650.050.

(b)
Aid in the enforcement of ORS 650.005 to 650.100 or in the formulation of rules
and forms that carry out ORS 650.005 to 650.100.

(2)
Require a person to file a statement in writing, under oath or otherwise,
concerning the matter being investigated.

(3)
When the director has reason to believe that a person has failed to comply with
ORS 650.010, issue an order to comply.

(4)
When the director has reason to believe that a person has engaged in, is
engaging in or is about to engage in an act or practice that would give rise to
liability under ORS 650.020, issue an order to cease and desist from the act or
practice.

(5)
When the director has reason to believe that a person has violated, is violating
or is about to violate a rule of the director adopted under ORS 650.050, issue
an order to cease and desist from the violation.

(6)
Publish information concerning any:

(a)
Failure to comply with ORS 650.010;

(b)
Act or practice that gives rise to liability under ORS 650.020;

(c)
Violation of a rule of the director adopted under ORS 650.050; or

(d)
Person who:

(A)
Fails to comply with ORS 650.010;

(B)
Commits an act or practice that gives rise to liability under ORS 650.020; or

650.057
Orders issued under ORS 650.055. (1) The Director of the Department of
Consumer and Business Services shall serve an order under ORS 650.055 on the
person named in the order.

(2)
An order issued under ORS 650.055 becomes effective upon service on the person
named in the order.

(3)
ORS 183.413 to 183.470 apply to orders issued under ORS 650.055.

(4)
Notwithstanding subsection (3) of this section, a person may not obtain a hearing
on the order unless the person requests the hearing within 20 days of service
of the order.

(5)
A person who does not request a contested case hearing may not obtain judicial
review of the order.

(6)
The director may vacate or modify an order issued under ORS 650.055 at any
time. A modified order is effective upon service on the person named in the
order. [2005 c.339 §3]

650.060
Investigative powers of director; protection against unreasonable
investigation; contempt. (1) For the purpose of any investigation or
proceeding under ORS 650.005 to 650.100, the Director of the Department of
Consumer and Business Services or any officer designated by the director may
administer oaths and affirmations, subpoena witnesses, compel their attendance,
take evidence, and require the production of any books, papers, correspondence,
memoranda, agreements, or other documents or records which the director
considers relevant or material to the investigation or proceeding.

(2)
Any person who is served with a subpoena or is subject to an order to give
testimony orally or in writing or to produce books, papers, correspondence,
memoranda, agreements or other documents or records as provided in ORS 650.005
to 650.100 may apply to any circuit court in Oregon for protection against
abuse or hardship in the manner provided in ORCP 36 C.

(3)
Except to the extent judicial relief may have been granted under subsection (2)
of this section, if any person disobeys a subpoena issued under subsection (1)
of this section, or if any witness refuses to testify or produce evidence
before the director on any matter on which the witness may be lawfully
interrogated, the circuit court of any county, upon application of the
director, shall compel obedience by proceedings for contempt as in the case of
disobedience of the requirements of a subpoena issued from such court or a
refusal to testify therein. [1973 c.509 §7; 1977 c.358 §10; 1979 c.284 §186]

650.065
Injunctive relief; attorney fees; appointment of receiver or conservator; conditions
of awarding damages and injunctive relief. (1) Whenever the Director of the
Department of Consumer and Business Services determines that any person has
engaged in, or is about to engage in, any act or practice which the director
believes would give rise to liability under ORS 650.020, the director may bring
suit in the name of the State of Oregon in any circuit court of this state to
enjoin the acts or practices. Upon a proper showing, the court shall grant a
permanent or temporary injunction or restraining order and may appoint a
receiver or conservator for the defendant or the defendant’s assets. The court
shall not require the director to post a bond. The court may award reasonable
attorney fees to the director if the director prevails in an action under this
section. The court may award reasonable attorney fees to a defendant who
prevails in an action under this section if the court determines that the
director had no objectively reasonable basis for asserting the claim or no
reasonable basis for appealing an adverse decision of the trial court.

(2)
The director may include in any suit authorized by subsection (1) of this
section a claim for any amount the franchisee could recover under ORS 650.020
or a claim for damages on behalf of other persons injured by any act or
practice against which an injunction or restraining order is sought. The court
may award appropriate relief to the franchisee or such other persons if the
court finds that enforcement of the right of the franchisee or other persons by
private civil action or suit, whether by class action or otherwise, would be so
burdensome or expensive as to be impractical. [1973 c.509 §8; 1981 c.897 §85;
1995 c.696 §41]

650.070
Director as agent for service of process. Except as provided in ORS 650.080,
the Director of the Department of Consumer and Business Services is an agent
for the service of any process, notice or demand required to be served in a
proceeding under ORS 650.005 to 650.100 for:

(1)
Every person who sells or offers to sell a franchise in this state; and

(2)
Every person, whether a resident or nonresident of this state, who has engaged
in conduct that is subject to a proceeding under ORS 650.020. [1973 c.509 §9]

650.075
Manner of executing service of process; effect of initial service. (1) The service
referred to in ORS 650.070 shall be made by:

(a)
Serving the Director of the Department of Consumer and Business Services or a
clerk on duty at the Department of Consumer and Business Services a copy of the
process, notice or demand, with any papers required by law to be delivered in
connection with the service, or by mailing to the department a copy of the
process, notice or demand by certified or registered mail, and a fee of $2 for
each party being served;

(b)
Transmittal of notice of the service on the director, together with one copy of
each of the papers required by law to be delivered in connection with the
service, by certified mail to the person being served:

(A)
At such person’s address, if any, as it appears in the records of the director;
and

(B)
At any address the use of which the person initiating the proceedings knows or,
on the basis of reasonable inquiry, has reason to believe is most likely to
result in actual notice to the person to be served; and

(c)
Filing with the appropriate court or other body, as part of the return of
service, the return mailing receipt and an affidavit of the person initiating
the proceedings that there has been compliance with this section and ORS
650.070.

(2)
After completion of initial service upon the director, no additional documents
need be served upon the director to maintain jurisdiction in the same
proceeding or to give notice of any motion or provisional process. [1973 c.509 §10;
1987 c.603 §27]

650.080
When personal service of process required. The method of service referred
to in ORS 650.075 may not be used if personal service can be used. [1973 c.509 §11]

650.085
Other civil or criminal remedies unaffected. Nothing in ORS 650.005 to
650.100 limits any statutory or common-law rights of a person to bring an
action in any court for an act involved in the sale of franchises, or the right
of the state to punish a person for a violation of any law. [1973 c.509 §12]

650.095
Civil penalties.
(1) In addition to any other liability or penalty provided by law, the Director
of the Department of Consumer and Business Services may impose a civil penalty
on a person for violation of a rule adopted under ORS 650.050 or an order
issued under ORS 650.055.

(2)(a)
The director shall impose a civil penalty under this section in the manner
provided in ORS 183.745.

(b)(A)
The civil penalty may not exceed $10,000 for each violation.

(B)
In the case of a continuing violation:

(i)
Each day that the violation continues is a separate violation.

(ii)
The civil penalty may not exceed $50,000. [2005 c.339 §4]

650.100
Disposition of civil penalties. All penalties recovered under ORS
650.095 shall be paid into the State Treasury and credited to the General Fund
and are available for general government expenses. [2005 c.339 §5]

MOTOR
VEHICLE DEALERSHIPS

650.120
Definitions for ORS 650.120 to 650.170. For the purposes of ORS 650.120 to
650.170:

(1)
“Dealer” means any person who has been issued a vehicle dealer certificate
under ORS 822.020 and pursuant to a franchise from a manufacturer, distributor
or importer engages in buying, selling, leasing or exchanging new motor
vehicles.

(2)
“Dealership” means the location from which a dealer buys, sells, leases,
trades, stores, takes on consignment or in any other manner deals in new motor
vehicles.

(3)
“Distributor” means a person who sells or distributes motor vehicles other than
motor homes to motor vehicle dealers.

(4)
“Fleet owner” means a person in this state who at one time buys or leases for
use in a business:

(a)
15 or more motor vehicles with a gross vehicle weight rating of less than 8,500
pounds; or

(b)
50 or more vehicles with a gross vehicle weight rating of 8,500 pounds or more.

(5)
“Franchise” means a contract or agreement under which:

(a)
The franchisee is granted the right to sell, lease and exchange new motor
vehicles manufactured, distributed or imported by the franchisor;

(b)
The franchisee’s business is an independent business operating as a component
of a distribution or marketing system prescribed in substantial part by the
franchisor;

(c)
The franchisee’s business is substantially associated with the trademark, trade
name, commercial symbol or advertisements designating the franchisor or the
products distributed by the franchisor;

(d)
The franchisee’s business is substantially reliant on the franchisor for a
continued supply of motor vehicles, parts and accessories;

(e)
The franchisee is granted the right to perform warranty repairs authorized by
the franchisor; and

(f)
The franchisee is granted the right to sell, install and exchange parts,
equipment and accessories manufactured, distributed or imported by the
franchisor for use in or on motor vehicles.

(6)
“Franchisee” means a dealer to whom a franchise is granted.

(7)
“Franchisor” means a manufacturer, distributor or importer who grants a
franchise to a dealer.

(8)
“Importer” means a person who transports or arranges for the transportation of
any foreign manufactured new motor vehicle into the United States for sale in
this state.

(9)
“Manufacturer” means a person who manufactures or assembles motor vehicles or
who manufactures or installs on previously assembled truck chassis special
bodies or equipment, other than motor homes, that when installed forms an
integral part of the motor vehicle and constitutes a major manufacturing
alteration and which completed unit is owned by the manufacturer.

(10)
“Manufacturer’s suggested retail price” means the retail price of the new motor
vehicle suggested by the manufacturer, including the retail delivered price
suggested by the manufacturer for each accessory or item of optional equipment
physically attached to the new motor vehicle at the time of delivery to the
dealer that is not included within the retail price suggested by the
manufacturer for the new motor vehicle without the accessory or optional
equipment.

(11)
“Motor home” means a motor vehicle that is designed to provide temporary living
quarters and is built into an integral part of, or is permanently attached to,
a self-propelled motor vehicle chassis or van. The vehicle must contain
permanently installed independent life support systems and provide at least
four of the following facilities:

(A)
For transportation of persons or property upon a public highway; or

(B)
In construction; or

(b)
A trailer with a gross vehicle weight rating of 20,000 pounds or more that is
used for commercial transportation on a public highway.

(13)
“Predecessor in interest” means a manufacturer, distributor or importer that
transferred to another manufacturer, distributor or importer, whether through
sale or other means, the right to manufacture, distribute or import motor
vehicles using the manufacturer’s, distributor’s or importer’s trademark,
service mark, trade name, logotype or other commercial symbol.

(14)
“Qualified vendor” means a person with a contract or agreement to sell goods or
services to a manufacturer, distributor or importer.

(15)
“Relevant market area” means:

(a)
For a dealer primarily of motor vehicles with a gross vehicle weight rating of
less than 8,500 pounds, a circular area around an existing dealership of:

(A)
Not less than a 10-mile radius from the dealership site;

(B)
Not less than a 15-mile radius from the dealership site if the population is
less than 250,000 within a 10-mile radius from the existing dealership and
150,000 or more within a 15-mile radius from the existing dealership;

(C)
Not less than a 20-mile radius from the dealership site if the population is
less than 150,000 within a 15-mile radius from the existing dealership; or

(D)
The area of sales and service responsibility determined under the franchise
agreement if the area is larger than the areas provided for in this paragraph.

(b)
For a dealer primarily of motor vehicles with a gross vehicle weight rating of
8,500 pounds or more, a circular area around an existing dealership of:

(A)
Not less than a 25-mile radius from the dealership site; or

(B)
The area of sales and service responsibility determined under the franchise
agreement if the area is larger than the area provided for in subparagraph (A)
of this paragraph.

(16)
“Replacement dealer” means any person who, at a dealership where the former
dealer was franchised by the same manufacturer, distributor or importer, or the
manufacturer’s, distributor’s or importer’s predecessor in interest, has been
issued a vehicle dealer certificate under ORS 822.020 and pursuant to a
franchise from a manufacturer, distributor or importer, or the manufacturer’s,
distributor’s or importer’s predecessor in interest, engages in buying,
selling, leasing or exchanging new motor vehicles.

(17)
“Site-control agreement” means an agreement between a franchisor and franchisee
pursuant to which the franchisor would:

(a)
Control the use and development of a dealership site other than as permitted in
ORS 650.120 to 650.170;

(b)
Require a franchisee to establish or maintain an exclusive dealership under a
franchise agreement with the franchisor by not investing in, managing or
sharing another dealership with a different franchisor; or

(c)
Restrict the ability of a franchisee, or if the franchisee leases the
dealership, the ability of the franchisee’s lessor, to transfer, assign, sell,
lease, develop or change the use of the dealership site.

650.130
Prohibited conduct by manufacturer, distributor or importer. Notwithstanding
the terms of any franchise or other agreement, a manufacturer, distributor or
importer may not:

(1)
Require or attempt to require a dealer to accept delivery of any motor vehicle,
part, accessory or any other commodity not voluntarily ordered by the dealer.
This subsection does not apply to recall safety and emissions campaign parts
not voluntarily ordered by the dealer or any vehicle features, parts, accessories
or other components mandated by federal, state or local law.

(2)
Coerce or attempt to coerce a dealer to enter any agreement or sales promotion
program by threatening to cancel the franchise of the dealer.

(3)
Refuse or fail to deliver, within a reasonable time and in a reasonable
quantity, any new motor vehicle, part or accessory covered by the franchise if
the vehicle, part or accessory is advertised as being available for delivery or
is being delivered to another dealer. This subsection does not apply if the
failure to deliver is the result of a cause beyond the control of the
manufacturer, distributor or importer.

(4)
Prevent or attempt to prevent a dealer from making reasonable changes in the
capital structure of a dealership or the means by which the dealership is
financed, provided that the dealer meets any reasonable capital requirement of
the manufacturer, distributor or importer.

(5)
Unreasonably refuse to compensate the dealer for work or services performed and
expenses incurred in accordance with the dealer’s delivery, preparation and
warranty obligations under the terms of a franchise or agreement.

(6)
Coerce or attempt to coerce a dealer to participate monetarily in any
advertising campaign or contest, or purchase any promotional materials, display
devices or display decorations or materials at the expense of the dealer.

(7)
Establish a maximum price a dealer may charge for motor vehicles with a gross
vehicle weight rating of less than 8,500 pounds.

(8)
Initiate an audit to determine the validity of paid claims for dealer
compensation or any charge-backs for warranty parts or service compensation
more than one year following the date of payment unless the manufacturer,
distributor or importer has reasonable grounds to believe that the dealer
submitted a fraudulent claim. If a manufacturer, distributor or importer
initiates an audit more than one year following the date of payment, the
manufacturer, distributor or importer may charge back to the dealer only the
amount of a claim that the manufacturer, distributor or importer proves was
fraudulent. Parties shall cooperate to ensure that permitted audits are
concluded within 60 days of initiation.

(9)
Initiate an audit to determine the validity of paid claims for dealer
compensation or any charge-backs for consumer or dealer incentives more than
one year following the date of payment unless the manufacturer, distributor or
importer has reasonable grounds to believe that the dealer submitted a
fraudulent claim. If a manufacturer, distributor or importer initiates an audit
more than one year following the date of payment, the manufacturer, distributor
or importer may charge back to the dealer only the amount of a claim that the
manufacturer, distributor or importer proves was fraudulent. Parties shall
cooperate to ensure that permitted audits are concluded within 60 days of
initiation.

(10)
Unfairly compete with a dealer in any matters governed by the franchise
including, but not limited to, the sale or allocation of vehicles or other franchisor
products, or the execution of dealer programs or benefits. This subsection
applies if the manufacturer, distributor or importer has an ownership interest
in, operates or controls, directly or indirectly, a business that is a dealer
in this state.

(11)
Have an ownership interest in, operate or control, directly or indirectly, a
business that sells or leases a motor vehicle to a person in Oregon except to a
franchisee of the manufacturer, distributor or importer. It is not a violation
of this subsection if:

(a)
A manufacturer, distributor or importer:

(A)
Has an ownership interest in, operates or controls, directly or indirectly, a
business that is a dealership in this state and is a business that:

(i)
A franchisee owned, operated or controlled before the manufacturer, distributor
or importer acquired the ownership interest in or began to operate or control
the business;

(ii)
The manufacturer, distributor or importer maintains an ownership interest in,
operates or controls for no more than two years; and

(iii)
While the manufacturer, distributor or importer maintains an ownership interest
in, operates or controls the business, the manufacturer, distributor or
importer offers the business for sale to any qualified independent person at a
fair and reasonable price.

(B)
Has a part ownership interest in, operates or controls, directly or indirectly,
a business that is a dealership in this state and another person:

(i)
Manages the day-to-day operations and business of the dealership;

(ii)
Has made, or is obligated to make within 12 months, a significant capital
investment in the dealership that is subject to loss;

(iii)
Has an ownership interest in the dealership; and

(iv)
Operates the dealership under a franchise through which the person will within
15 years acquire full ownership of the dealership under reasonable terms and
conditions.

(C)
As of January 1, 2000, had an ownership interest in, operated or controlled,
directly or indirectly, a business that is a dealership in this state that
sells motor vehicles with a gross vehicle weight rating of 8,500 pounds or
more.

(D)
Has an ownership interest in, operates or controls, directly or indirectly, a
business that primarily leases or rents motor vehicles for a period of 12
months or less and the only motor vehicles that the business sells are motor
vehicles that have been:

(i)
Owned by the business for 180 days or more; or

(ii)
Driven more than 10,000 miles while owned by the business.

(E)(i)
Has an ownership interest in, operates or controls, directly or indirectly, a
business that finances the sale or lease of motor vehicles; and

(ii)
Is a business that sells or leases motor vehicles to retail lessees in Oregon.

(F)
Has an ownership interest in, operates or controls, directly or indirectly, a
business that makes a sale or lease of a motor vehicle that is not a violation
of subsection (12) of this section.

(b)
A manufacturer has a part ownership interest in, operates or controls, directly
or indirectly, a business that is a dealership in this state that buys, sells,
leases, trades, stores, takes on consignment or in any other manner deals
exclusively in a single line-make of the manufacturer and:

(A)
The manufacturer has, directly or indirectly, no more than 45 percent of the
ownership interest in the dealership;

(B)
When the manufacturer acquires an ownership interest in the dealership, the
distance from the manufacturer’s dealership to the dealership of a dealer that
buys, sells, leases, trades, stores, takes on consignment or in any other manner
deals in the single line-make of the manufacturer and in which the manufacturer
has no ownership interest is not less than 15 miles;

(C)
The manufacturer complies with the area restrictions in ORS 650.120 and
650.150;

(D)
The manufacturer’s franchises authorize a dealer of the single line-make of the
manufacturer to operate as many dealerships within a defined geographic area as
the dealer and manufacturer agree on; and

(E)
On January 1, 2000:

(i)
There were no more than four dealers in the state of the manufacturer’s single
line-make; and

(ii)
Of the dealers in this state of the manufacturer’s single line-make, at least
one was a franchisee that owned and operated at least two dealerships within
the geographic area authorized by franchises with the manufacturer.

(12)
Sell or lease a motor vehicle to a person in this state other than to a
business described in subsection (11) of this section or to a franchisee of the
manufacturer, distributor or importer. It is not a violation of this subsection
if:

(a)
The manufacturer, distributor or importer sells or leases a motor vehicle to:

(A)
An employee, retired employee or family member of an employee or retired
employee of the manufacturer, distributor or importer;

(B)
A driver training program;

(C)
A nonprofit corporation;

(D)
A qualified vendor;

(E)
A public agency as defined in ORS 537.515;

(F)
A current retail lessee;

(G)
A fleet owner;

(H)
A business acting as a vehicle dealer under ORS chapter 822 that sells motor
vehicles only to other vehicle dealers; or

(I)
The customers of a business acting as a vehicle dealer under ORS chapter 822
that sells motor vehicles only to other vehicle dealers.

(b)
The sale or lease is by a business in this state that primarily leases or rents
motor vehicles for a period of 12 months or less and the only motor vehicles
that the business sells are motor vehicles that have been:

(A)
Owned by the business for 180 days or more; or

(B)
Driven more than 10,000 miles while owned by the business.

(c)
The sale or lease is by a subsidiary of a manufacturer, distributor or importer
that finances the sale or lease of motor vehicles and the sale or lease is to a
person who previously leased the vehicle from the subsidiary.

(13)(a)
Own, operate or control a business or enter into any contract, agreement or
other written instrument permitting a person that is not a dealer to be
compensated by the manufacturer, distributor or importer for performing
warranty repairs and services if the business is located within a dealer’s
relevant market area.

(b)
Paragraph (a) of this subsection does not apply to:

(A)
Warranty repairs and services performed on motor vehicles with a gross vehicle
weight rating of less than 8,500 pounds provided for commercial or government
fleets; or

(B)
Warranty repairs and services performed on motor vehicles with a gross vehicle
weight rating of 8,500 pounds or more if, after January 1, 2002, a
manufacturer, distributor or importer of only motor vehicles with a gross
vehicle weight rating of 8,500 pounds or more has:

(i)
Obtained written permission from the dealers in the relevant market area to
perform the repairs or services; or

(ii)
Authorized the repairs or services to be performed by a person who owns or
leases the motor vehicles for use in the person’s business.

(14)
Terminate, cancel, fail to renew or fail to approve the sale, transfer or
assignment of any franchise agreement because the dealer owns, has an
investment in, participates in the management of or holds a franchise agreement
with another manufacturer, distributor or importer at a different dealership
site, or has franchises with more than one manufacturer, distributor or
importer sharing the same dealership site, facilities, personnel or display
space before October 23, 1999.

(15)
Terminate, cancel, fail to renew or fail to approve the sale, transfer or
assignment of any franchise agreement because the dealer owns, has an
investment in, participates in the management of or holds a franchise agreement
with another manufacturer, distributor or importer at a different dealership
site, or has franchises with more than one manufacturer, distributor or
importer sharing the same dealership site, facilities, personnel or display
space on or after January 1, 2012, provided the dealer complies with the
manufacturer’s, distributor’s or importer’s reasonable capitalization and
financial requirements, reasonable space and facility requirements and other
requirements that are justified taking into account the reasonable business
considerations of the manufacturer, distributor or importer and the dealer, and
provided there is no change in the principal management of the dealership site.

(16)(a)
Require a prospective franchisee to enter into a site-control agreement as a
condition of:

(A)
Granting or renewing a franchise;

(B)
Approving the addition of a line-make of a manufacturer;

(C)
Approving the sale, transfer or assignment of a franchise agreement;

(D)
Approving the relocation, or granting a new franchise for relocation, of an
existing dealership; or

(E)
Obtaining fair and reasonable compensation under ORS 650.145 upon the
termination, cancellation, nonrenewal or discontinuance of any franchise.

(b)
Nothing in paragraph (a) of this subsection prohibits enforcement of a
voluntary agreement between a franchisee and a manufacturer, distributor or
importer for which separate and valuable consideration that does not include
any of the items listed in paragraph (a) of this subsection has been offered
and accepted. [1980 c.3 §2; 1989 c.716 §5; 1999 c.660 §2; 2001 c. 216 §2; 2001
c.825 §2; 2003 c.411 §2; 2011 c.177 §2]

650.133
Constructing, altering or remodeling dealer facility; prohibitions; exceptions;
purchasing goods or services from specific vendor; intellectual property
infringement.
(1)(a) Except as provided in paragraph (b) of this subsection, a manufacturer,
distributor or importer may not require a dealer to construct a new dealer
facility or materially alter or remodel an existing dealer facility within
seven years after the date on which the dealer previously constructed,
materially altered or remodeled the existing dealer facility if the existing
dealer facility complies with the manufacturer’s, distributor’s or importer’s
approved brand image standards or plans that existed at the time the dealer
constructed, materially altered or remodeled the existing dealer facility.

(b)
A manufacturer, distributor or importer may require a dealer to construct a new
dealer facility or materially alter or remodel an existing dealer facility
within seven years after the dealer constructed, materially altered or
remodeled the existing dealer facility:

(A)
If the manufacturer, distributor or importer demonstrates that the manufacturer’s,
distributor’s or importer’s requirement is reasonable and justifiable in light
of:

(i)
The projected cost of the construction, material alteration or remodel;

(ii)
Existing and reasonably foreseeable economic conditions;

(iii)
Financial expectations;

(iv)
The availability of additional vehicle allocation; and

(v)
The dealer’s market for vehicle sales;

(B)
In order to comply with a health or safety law or with a technological
requirement that is necessary to sell or service a motor vehicle that the
dealer sells or services under the terms of the dealer’s franchise; or

(C)
By means of a written agreement separate from the franchise agreement if the
manufacturer, distributor or importer provides money, credit, an allowance, an
incentive or a reimbursement to the dealer to compensate for all or a
substantial portion of the cost of constructing a new dealer facility or
materially altering or remodeling an existing dealer facility.

(c)
Paragraph (a) of this subsection does not prohibit a dealer from voluntarily
agreeing with a manufacturer, distributor or importer to construct a new dealer
facility or materially alter or remodel an existing dealer facility in return
for separate and valuable consideration. For the purposes of this paragraph,
renewing a dealer’s franchise is not separate and valuable consideration.

(d)
For purposes of this subsection:

(A)
“Materially alter” means a significant architectural or structural modification
to a dealer facility that is directly related to effectively selling or
servicing motor vehicles of the type that the dealer’s franchise agreement or
license permits the dealer to sell or service.

(B)
“Materially alter” does not include routine maintenance, such as interior
painting, that is reasonably necessary to keep a dealer facility in attractive
condition.

(2)(a)
Except as provided in paragraph (b) of this subsection, a manufacturer,
distributor or importer may not require a dealer to purchase goods or services
for constructing, materially altering or remodeling a dealer facility from a
vendor that the manufacturer, distributor or importer selects, identifies or
designates without giving the dealer an option to obtain goods or services of
substantially similar quality and design from a vendor that the dealer chooses,
subject to the manufacturer’s, distributor’s or importer’s approval in advance.
The manufacturer, distributor or importer may not withhold approval
unreasonably.

(b)
A dealer may not select a vendor from which to obtain goods and services for
constructing a new dealer facility or materially altering or remodeling an
existing dealer facility if a manufacturer, distributor or importer provides
money, credit, an allowance or a reimbursement to compensate for all or a
substantial portion of the cost of upgrading or improving a dealer facility or
for using a specific material, good or service to upgrade or improve a dealer
facility.

(c)
This subsection does not permit a dealer or vendor to:

(A)
Directly or indirectly or in any way infringe upon, eliminate or impair a
manufacturer’s, distributor’s or importer’s intellectual property rights or
reasonable business requirements; or

(B)
Erect or maintain signs that do not conform to the manufacturer’s, distributor’s
or importer’s intellectual property usage guidelines. [2013 c.329 §2]

650.140
Good cause required to terminate dealer franchise; protest of termination;
notice; when reasons for termination required. (1)
Notwithstanding the terms of any franchise or other agreement, it is unlawful
for any manufacturer, distributor or importer to cancel, terminate or refuse to
continue any franchise without showing good cause, provided the dealer protests
the termination by filing a complaint in court of competent jurisdiction within
the time period specified in subsection (3) of this section.

(2)
In determining if good cause exists pursuant to subsection (1) of this section,
the court shall consider such factors as:

(a)
The amount of business transacted by the dealer as compared to the amount of
business available to the dealer.

(b)
The investment necessarily made and obligations necessarily incurred by the
franchisee in performance of the franchise.

(c)
The permanency of the investment.

(d)
The adequacy of the franchisee’s new motor vehicle sales and service
facilities, equipment and parts.

(e)
The qualifications of the management, sales and service personnel to provide
the consumer with reasonably good service and care of new motor vehicles.

(f)
The failure of the franchisee to substantially comply in good faith with those
requirements of the franchise that are reasonable.

(3)
Notwithstanding the terms of any franchise or other agreement, a franchisor
shall give a franchisee 60 days’ written notice stating the specific reasons
for cancellation, termination or noncontinuance of a franchise, provided that a
franchisor need only give 30 days’ written notice concerning the following
reasons:

(a)
Misrepresentation by the franchisee in applying for the franchise.

(b)
Insolvency of the franchisee, or filing of any petition by or against the
franchisee, under any bankruptcy or receivership law.

(c)
Conviction of a felony, provided that conviction after a plea nolo contendere
shall be considered a conviction for purposes of this subsection.

(d)
Failure of the dealer to maintain its operation open for business for seven
consecutive business days or for eight business days out of any 15-business-day
period.

(4)
Notwithstanding the terms of any franchise or other agreement, a franchisee’s
unwillingness to agree to a site-control agreement does not constitute good
cause under this section.

(5)(a)
If a manufacturer, distributor or importer cancels, terminates or refuses to
continue any franchise with the dealer for any reason other than good cause
pursuant to the terms of the franchise agreement or for good cause as that term
is used in this section, and the manufacturer, distributor or importer did not
cancel at the same time a franchise with another motor vehicle dealership of
the same line-make within the dealer’s relevant market area, the manufacturer,
distributor or importer, or where applicable the manufacturer’s, distributor’s
or importer’s successor in interest, shall provide the dealer with the specific
reasons why the dealer’s franchise was canceled, terminated or not continued
and another dealer’s franchise of the same line-make within the dealer’s
relevant market area was retained or renewed.

(b)
The information required by paragraph (a) of this subsection must include the
criteria and data used in making the determination to cancel, terminate or not
continue, or to retain or renew, the franchise, and must be provided within a
reasonable period of time not to exceed 30 days after the manufacturer,
distributor or importer gives notice of the cancellation, termination or
refusal to continue. [1980 c.3 §3; 2009 c.627 §4; 2011 c.177 §3]

650.145
Compensation due dealer upon termination of franchise. (1) As used in
subsection (2) of this section, “fair and reasonable compensation” means the
amount originally paid by the dealer minus any incentive payments, model
close-out allowances or any other programs applicable to the vehicles.

(2)
Upon the termination, cancellation, nonrenewal or discontinuance of any
franchise, the dealer shall be allowed fair and reasonable compensation by the
manufacturer, distributor or importer for the following:

(a)
All new vehicles manufactured in the current calendar year and any subsequent
calendar year in the motor vehicle inventory purchased from the manufacturer,
distributor or importer that have not been materially altered, substantially
damaged or driven for more than 300 miles;

(b)
All new vehicles in the motor vehicle inventory that have not been materially
altered or substantially damaged, provided that the vehicles:

(A)
If motor vehicles with a gross vehicle weight rating of less than 8,500 pounds,
were not driven for more than 300 miles, were purchased directly from the
manufacturer, distributor or importer within 120 days of the effective date of
the termination, cancellation, nonrenewal or discontinuance and were either
paid for or drafted on the dealer’s financing source; or

(B)
If motor vehicles with a gross vehicle weight rating of 8,500 pounds or more,
were not driven more than 3,500 miles, were purchased directly from the
manufacturer, distributor or importer within one year of the effective date of
the termination, cancellation, nonrenewal or discontinuance and were either
paid for or drafted on the dealer’s financing source;

(c)
Supplies and parts inventory purchased from the manufacturer, distributor or
importer and listed in the manufacturer’s, distributor’s or importer’s current
parts catalog;

(d)
Equipment, furnishings and signs purchased from the manufacturer, distributor
or importer and required by the manufacturer, distributor or importer that have
not been materially altered, or substantially damaged or depreciated over 50
percent of the original value; and

(e)
Special tools purchased from the manufacturer, distributor or importer within
three years of the date of termination, cancellation, nonrenewal or
discontinuance and required by the manufacturer that have not been materially
altered, or substantially damaged or depreciated over 50 percent of the
original value.

(3)
Nothing in this section is intended to modify the manufacturer’s, distributor’s
or importer’s contractual right of setoff.

(4)
Upon the termination, cancellation, nonrenewal or discontinuance of a
franchise, the manufacturer, distributor or importer shall also pay to the
dealer a sum equal to the current, fair rental value of the dealer’s
established place of business for a period of one year from the effective date
of termination, cancellation, nonrenewal or discontinuance or the remaining
period of any lease, whichever is less.

(5)
Subsection (4) of this section shall apply only to the extent that the dealer’s
established place of business is used for performance of sales and service
obligations under the manufacturer’s, distributor’s or importer’s franchise
agreement.

(6)
In the event that termination is by the dealer, the payment required by
subsection (4) of this section is not required.

(7)
This section shall not relieve a new motor vehicle dealer, lessor or other
owner of an established place of business from the obligation of mitigating
damages. [1989 c.716 §2; 2001 c.216 §3; 2007 c.71 §203; 2009 c.627 §1]

650.150
Enjoining establishment of certain franchises or relocation of existing
dealership in same market area; complaint; determination of good cause; when
offer of new franchise or relocated dealership required; notice to existing or
former dealerships; attorney fees. (1) A dealer or former dealer may
enjoin a manufacturer, distributor or importer, or the manufacturer’s,
distributor’s or importer’s successor in interest, from franchising an
additional motor vehicle dealership of the same line-make within the dealer’s
or former dealer’s relevant market area for good cause, provided that the
dealer files a complaint with a court of competent jurisdiction within 60 days
of receiving the notice specified in subsection (6) of this section. For
purposes of this section, “relevant market area” has the meaning given that
term in ORS 650.120, but other factors such as actual sales and service area
must be considered.

(2)
A dealer or former dealer may enjoin a manufacturer, distributor or importer,
or the manufacturer’s, distributor’s or importer’s successor in interest, from
relocating an existing motor vehicle dealership of the same line-make within
the dealer’s or former dealer’s relevant market area for good cause, provided
that the dealer or former dealer files a complaint with a court of competent
jurisdiction within 60 days of receiving the notice specified in subsection (6)
of this section. This subsection does not apply to an existing dealership or to
the dealership of a replacement dealer that is relocating to a site within a
one-mile radius of its existing site if the relevant market area of the
existing or replacement dealership is not more than 10 miles, within a two-mile
radius of its existing site if the relevant market area of the existing or
replacement dealership is not more than 15 miles and within a three-mile radius
of the existing site if the relevant market area of the existing or replacement
dealership is more than 15 miles.

(3)(a)
A dealer or former dealer may enjoin a manufacturer, distributor or importer,
or the manufacturer’s, distributor’s or importer’s successor in interest, from
franchising a replacement dealer to operate a dealership of the same line-make
within the dealer’s or former dealer’s relevant market area for good cause,
provided that the franchising of the replacement dealer has not occurred within
one year of the expiration or termination of the former franchise and the
dealer files a complaint with a court of competent jurisdiction within 60 days
of receiving the notice specified in subsection (6) of this section. For the
purposes of this section, “relevant market area” has the meaning given that
term in ORS 650.120, but other factors such as actual sales and service area
must be considered.

(b)
Notwithstanding paragraph (a) of this subsection, when good cause exists as
provided in subsection (5) of this section, a dealer or former dealer may
enjoin a manufacturer, distributor or importer, or the manufacturer’s,
distributor’s or importer’s successor in interest, under this subsection within
five years of the expiration or termination of the former franchise without
regard to when the franchising of the replacement dealer took place or will
take place.

(4)
In determining whether good cause exists pursuant to subsection (1), (2) or (3)
of this section, the court may consider all factors that the court considers
relevant, but in any case shall consider the following factors:

(a)
Whether threats or other coercive action, oral or written, were made to or
taken against the dealer by the manufacturer, distributor or importer.

(b)
Whether the dealer is asked to terminate one franchise in order to keep another
franchise.

(c)
Whether the manufacturer, distributor or importer, or the manufacturer’s,
distributor’s or importer’s successor in interest, breached the terms or
provisions of a franchise.

(d)
Whether the manufacturer, distributor or importer, or the manufacturer’s,
distributor’s or importer’s successor in interest, engaged in conduct
prohibited under ORS 650.130.

(e)
Whether the manufacturer, distributor or importer, or the manufacturer’s,
distributor’s or importer’s successor in interest, canceled, terminated or
refused to continue a franchise without good cause under ORS 650.140.

(f)
Whether there will be an unjustifiable adverse effect upon existing dealers
because of the grant of the new franchise or the relocation of an existing
franchise. For purposes of this paragraph, the court may consider all factors
that the court determines relevant, but in any case shall consider the
following factors:

(A)
The extent, nature and permanency of the investment of the existing motor
vehicle dealers and the proposed motor vehicle dealer.

(B)
The effect on the retail motor vehicle business in the relevant market area.

(C)
The growth or decline in population and in new motor vehicle registrations in
the relevant market area.

(g)
The effect on consumers in the relevant market area. For purposes of this
paragraph, the court may consider all factors that the court determines
relevant, but in any case shall consider the following factors in the relevant
market area:

(A)
The adequacy and convenience of existing motor vehicle sales facilities and
service facilities.

(B)
The supply of motor vehicle parts and qualified service personnel.

(C)
The existence of competition among existing dealers.

(5)(a)
Notwithstanding subsection (4) of this section, good cause as used in this
section shall be deemed to exist without consideration of any other factors
when a dealer or former dealer’s franchise was canceled, terminated or not
continued for any reason other than good cause pursuant to the terms of the
franchise agreement or as a result of the manufacturer, distributor or
importer, or the manufacturer’s, distributor’s or importer’s successor in
interest, having breached the terms of the franchise agreement.

(b)
A manufacturer, distributor or importer, or a manufacturer’s, distributor’s or
importer’s successor in interest, enjoined for good cause under this subsection
shall offer the franchise sought to be granted or relocated to the dealer or
former dealer whose franchise was canceled, terminated or not continued. The
dealer or former dealer shall have 60 days within which to accept or reject the
offer required under this paragraph. Only after a dealer or former dealer has
declined, rejected or failed to respond to the offer required under this
paragraph, may the manufacturer, distributor or importer, or the manufacturer’s,
distributor’s or importer’s successor in interest, offer to grant the franchise
to another dealer or replacement dealer or relocate an existing motor vehicle
dealership.

(6)
A manufacturer, distributor or importer must give a dealer or former dealer at
least 60 days’ written notice prior to franchising a new dealership of the same
line-make or authorizing the relocation of another dealership of the same
line-make within the relevant market area of the dealer’s or former dealer’s
dealership. Notice under this subsection must be given to all dealers and
former dealers of the same line-make within the relevant market area of the
site of the proposed new or relocated dealership.

(7)
If a dealer or former dealer enjoins or files an action to enforce rights
arising under this section against a manufacturer, distributor or importer, or
a manufacturer’s, distributor’s or importer’s successor in interest, the
manufacturer, distributor or importer, or the manufacturer’s, distributor’s or
importer’s successor in interest, shall pay the dealer’s or former dealer’s
court costs and attorney fees if the dealer or former dealer prevails
regardless of whether a new dealership was actually established. [1980 c.3 §4;
1985 c.67 §1; 1993 c.216 §2; 1999 c.660 §3; 2009 c.627 §5]

650.153
Liability of franchisor for repair of motor vehicle that becomes inoperative prior
to sale to consumer.
(1) If a new motor vehicle becomes inoperative prior to being sold to a
consumer, the franchisor is liable for the repair of the motor vehicle if the
motor vehicle is inoperative due to a mechanical failure that is not the result
of negligence on the part of the franchisee.

(2)
Whenever a new motor vehicle becomes inoperative, the franchisee shall notify
the franchisor and request authorization from the franchisor to repair the
vehicle.

(3)
If the franchisor refuses or fails to authorize repair of the inoperative motor
vehicle within 30 business days after receiving notice under subsection (2) of
this section, ownership of the new motor vehicle shall revert back to the
franchisor, and the franchisee shall have no obligation, financial or
otherwise, with respect to the motor vehicle.

(4)
If the franchisor is unable to deliver to the franchisee the parts needed to
repair an inoperative new motor vehicle within 30 business days after receiving
notice under subsection (2) of this section, ownership of the new motor vehicle
shall revert to the franchisor, and the franchisee shall have no obligation,
financial or otherwise, with respect to the motor vehicle. [1999 c.660 §8; 2005
c.22 §453]

650.155
Liability of manufacturer for damages to vehicles before delivery to carrier. (1)
Notwithstanding the terms of any franchise, the manufacturer is liable for any
and all damage to new motor vehicles before delivery to a carrier or
transporter.

(2)
Whenever a new motor vehicle is damaged in transit, the dealer shall:

(a)
Notify the manufacturer of the damage within three business days from the date
of delivery to the dealer or within any additional time as specified in the
franchise; and

(b)
Request from the manufacturer authorization to replace the components, parts
and accessories damaged or to otherwise repair the damage.

(3)
If the manufacturer refuses or fails to authorize repair of any damage within
10 days after receipt of notification under subsection (2) of this section, or
within any additional time as specified in the franchise, ownership of the new
motor vehicle shall revert to the manufacturer, and the new motor vehicle
dealer shall have no obligation, financial or otherwise, with respect to the
motor vehicle.

(4)
A manufacturer shall disclose in writing to a dealer, at the time of delivery
of a new motor vehicle, the nature and extent of any and all damage and
post-manufacturing repairs.

(5)
If the total value of repairs to a new motor vehicle by the manufacturer’s
authorized agent and a dealer equals or exceeds the amount specified under
subsection (6) of this section, the manufacturer may either repurchase the
motor vehicle from the dealer, or provide reasonable and adequate compensation
to the dealer to assist in sale or disposition of the new motor vehicle, as
long as the dealer has complied with all other contractual agreements with
regard to damaged vehicles. If the manufacturer repurchases the motor vehicle,
the dealer shall have no obligation, financial or otherwise, with respect to
the motor vehicle.

(6)
A dealer shall disclose, in writing, to a purchaser of the new motor vehicle
prior to entering into a sales contract that the new motor vehicle has been
damaged and repaired if the damage to the new motor vehicle exceeds $1,000, as
calculated at the rate of the dealer’s authorized warranty rate for labor and
parts. Replacement of glass, tires, bumpers or any comparable nonwelded
component is not considered damage and repair for purposes of this section. For
purposes of this subsection, “comparable nonwelded component” does not include
a fender, hood, trunk lid or door. [1989 c.716 §3; 1999 c.660 §4; 2003 c.411 §3;
2009 c.627 §2]

650.158
Predelivery preparation and warranty service; notice to dealers; schedule of
compensation; determination; claims by dealers. (1) Each
manufacturer, distributor or importer shall specify in writing to each of the
manufacturer’s, distributor’s or importer’s dealers in this state:

(a)
The dealer’s obligations for predelivery preparation and warranty service on
the manufacturer’s, distributor’s or importer’s motor vehicles;

(b)
The schedule of compensation the manufacturer, distributor or importer will pay
the dealer for parts, work and service in connection with predelivery
preparation and warranty service; and

(c)
The time allowances for performing predelivery preparation and warranty
service.

(2)(a)
A schedule of compensation must include reasonable compensation for diagnostic
work, repair service and labor. Time allowances for diagnosing and performing
predelivery and warranty service must be reasonable and adequate for the work
to be performed. A manufacturer, distributor or importer may not pay an hourly
rate to a dealer that is less than the rate the dealer charges nonwarranty
customers for nonwarranty service and repairs. Reimbursement for parts,
other than parts used to repair the living facilities of motor homes, that the
dealer purchases for use in performing predelivery and warranty service must be
the amount the dealer charges nonwarranty customers, as long as the amount is
not unreasonable.

(b)(A)
For purposes of this subsection and subject to subparagraphs (B) and (C) of
this paragraph, to determine compensation under this subsection, a dealer shall
propose an hourly rate and an amount for parts that the dealer charges
nonwarranty customers by submitting to the manufacturer, distributor or
importer copies of 100 sequential nonwarranty service repair invoices that
customers paid or 90 consecutive days’ worth of nonwarranty service invoices
that customers paid, whichever is less, for repairs made not more than 180 days
before the dealer’s submission. If the manufacturer, distributor or importer
does not contest the dealer’s proposal and the dealer otherwise complies with
the provisions of this paragraph, the dealer’s proposal is presumed to be fair
and reasonable.

(B)
A manufacturer, distributor or importer may contest the dealer’s proposal with
evidence that the dealer’s proposal is not accurate or on the basis that the
dealer’s proposal does not reasonably conform with the hourly rate or the
amount for parts that other dealers charge nonwarranty customers in the same
line-make in market areas that are contiguous to the dealer’s market area or
with other relevant evidence. In contesting a dealer’s proposal based on
evidence from other dealers in the contiguous market area, a manufacturer,
distributor or importer shall rely on evidence from at least three other
dealers in the contiguous market area or three dealers in an economically
similar market within the manufacturer’s, distributor’s or importer’s region.

(C)
A dealer may not include in the dealer’s proposal:

(i)
Repairs for a manufacturer’s, distributor’s or importer’s specials, special
events or promotional discounts for retail customer repairs;

(ii)
Parts sold at wholesale;

(iii)
Routine maintenance that a retail customer warranty does not cover, such as
fluids, filters and belts that a dealer uses in performing work other than
repairs;

(iv)
Nuts, bolts, fasteners and similar items that do not have an individual part
number; and

(v)
Vehicle reconditioning.

(c)
The hourly rate or the amount for parts that a dealer charges nonwarranty customers
that the dealer proposes under paragraph (b)(A) of this subsection becomes
effective 30 days after the manufacturer, distributor or importer approves the
hourly rate or the amount for parts. For purposes of this paragraph, a
manufacturer, distributor or importer approves the dealer’s proposal if the
manufacturer, distributor or importer does not contest the proposed hourly rate
or amount for parts within 30 days after the dealer submits the proposal.

(d)
If a manufacturer, distributor or importer successfully contests a dealer’s
proposal, the manufacturer, distributor or importer shall propose an adjustment
to the dealer’s proposal not later than 30 days after the dealer submits the
dealer’s proposal.

(e)
Once per year, a manufacturer, distributor or importer may verify the dealer’s
hourly rate or the amount for parts the dealer charges nonwarranty customers.
If the manufacturer, distributor or importer finds that the dealer’s hourly
rate or the amount for parts has decreased, the manufacturer, distributor or
importer may reduce the dealer’s compensation under this subsection
prospectively.

(3)
A manufacturer, distributor or importer shall include, in written notices of
vehicle recalls to motor vehicle owners and dealers, the expected date by which
necessary parts and equipment will be available to the dealers to correct the
defect or defects. A manufacturer, distributor or importer shall adequately
compensate a dealer for repair service the dealer performs under the recall.

(4)
A manufacturer, distributor or importer shall:

(a)
Pay or credit a dealer for labor or parts the dealer claims under this section
within 30 days after approving the dealer’s claim;

(b)
Approve or disapprove, in the manner the manufacturer, distributor or importer
specifies, all claims that a dealer makes for labor or parts within 30 days
after receiving the claim;

(c)
Treat as approved any claim that a manufacturer, distributor or importer did
not approve or disapprove within 30 days after the manufacturer, distributor or
importer received the claim and pay or credit the dealer for the claim within
60 days after receiving the claim; and

650.162
Transfer, assignment or sale of interest in dealership or franchise; notices;
approval of franchisor; right of first refusal. (1) To
transfer, assign or sell the ownership or management, or any interest in the
ownership or management, of a dealer, dealership or franchise, the dealer shall
notify the franchisor of the decision to transfer, assign or sell. The notice
shall include completed application forms and related information generally
used by the manufacturer, distributor or importer to conduct a review of
transfers, assignments or sales and a copy of all agreements regarding the
transfer, assignment or sale.

(2)
Within 60 days of receiving notice sent under subsection (1) of this section, a
franchisor shall send a notice by certified mail to the dealer. The notice sent
under this subsection shall specify approval or disapproval of the transfer,
assignment or sale. If the transfer, assignment or sale is disapproved, the notice
shall set forth material reasons for the disapproval.

(3)
A manufacturer, distributor or importer may not unreasonably withhold approval
of a transfer, assignment or sale. It is unreasonable for a manufacturer,
distributor or importer to reject a prospective transferee, assignee or buyer
who is of good moral character and who otherwise meets the manufacturer’s,
distributor’s or importer’s written and reasonable standards or qualifications
relating to the prospective transferee’s, assignee’s or buyer’s:

(a)
Business experience and performance; and

(b)
Financial qualifications.

(4)
If the manufacturer, distributor or importer does not respond within 60 days of
receiving a notice sent under subsection (1) of this section, the transfer,
assignment or sale shall be considered approved and shall take effect.

(5)
A manufacturer, distributor or importer may exercise a right of first refusal
if the right is included in the franchise agreement, the transfer, assignment
or sale consists of more than 50 percent of the dealer’s ownership of the
franchise and all of the following requirements are met:

(a)
The manufacturer, distributor or importer sends a notice by certified mail to
the dealer within 60 days of receiving a notice under subsection (1) of this section
specifying that the franchisor is exercising a right of first refusal.

(b)
The exercise of the right of first refusal will result in the dealer and any
owner of the dealer receiving consideration, terms and conditions that are
either the same as or better than those contracted to receive under the
transfer, assignment or sale.

(c)
The transferee, assignee or buyer is not any of the following:

(A)
Any of the following family members of any owner of the dealer:

(i)
A spouse;

(ii)
A child or stepchild;

(iii)
A grandchild or stepgrandchild;

(iv)
The spouse of a child, stepchild, grandchild or stepgrandchild;

(v)
A brother or sister or a stepbrother or stepsister; or

(vi)
A parent or stepparent;

(B)
A manager employed by the dealer who is otherwise qualified to be a dealer;

(C)
A partnership or corporation controlled by any of the family members listed in
paragraph (c)(A) of this subsection; or

(D)
A trust established or to be established:

(i)
For the purposes of allowing the transferee, assignee or buyer to continue to
qualify as such under the manufacturer’s, distributor’s or importer’s
standards; or

(ii)
To provide for the succession of the franchise to qualified designated family
members or a qualified manager in the event of the death or incapacity of the
dealer.

(d)
The manufacturer, distributor or importer pays the reasonable expenses,
including attorney fees, that are incurred by the transferee, assignee or buyer
before the manufacturer, distributor or importer exercises a right of first
refusal. A manufacturer, distributor or importer may require the transferee,
assignee or buyer to provide an accounting of expenses incurred prior to
issuing payment. [1999 c.660 §9]

650.165
Prohibited franchise conditions. It shall be a violation of ORS 650.120
to 650.170 for a franchisor to require a franchisee to agree to the inclusion
of a term or condition in a franchise, or in any lease or agreement ancillary
or collateral to a franchise, as a condition to the offer, grant or renewal of
such franchise, lease or agreement, that:

(1)
Requires the franchisee to waive trial by jury in actions involving the
franchisor.

(2)
Specifies the jurisdictions, venues or tribunals in which disputes arising with
respect to the franchise, lease or agreement shall or shall not be submitted
for resolution or otherwise prevents a franchisee from bringing an action in a
particular forum otherwise available under the law.

(3)
Requires that disputes between the franchisor and franchisee be submitted to
arbitration or to any other binding alternative dispute resolution procedure.
However, any such franchise, lease or agreement may authorize the submission of
a dispute to arbitration or to binding alternative dispute resolution if the
franchisor and franchisee voluntarily agree to submit such dispute to
arbitration or binding alternative dispute resolution at the time the dispute
arises.

650.167
Violation of ORS 650.140 or 650.150 as irreparable injury. In any action
brought by a dealer against a manufacturer, distributor or importer under ORS
650.120 to 650.170, any violation of ORS 650.140 or 650.150 by a manufacturer,
distributor or importer may be considered an irreparable injury to the dealer
for determining if a temporary restraining order should be issued. [1991 c.609 §2]

650.170
Dealer’s remedy.
(1) Any dealer injured, or threatened with injury, by a manufacturer,
distributor or importer as a result of a violation of ORS 650.120 to 650.170
may sue to enjoin such illegal, or threatened illegal conduct.

(2)
The court, in an action brought under ORS 650.120 to 650.170, may award damages
to a dealer who demonstrates an actual loss of money as a result of illegal
conduct by a manufacturer, distributor or importer.

(3)
Any action for damages under ORS 650.120 to 650.170 shall be brought within two
years of the injury. In any action brought under ORS 650.120 to 650.170, the
court may award reasonable attorney fees and costs to the prevailing party. [1980
c.3 §6]

MOTOR
FUEL FRANCHISES

650.200
Definitions for ORS 650.200 to 650.250. As used in ORS 650.200 to 650.250,
unless the context requires otherwise:

(1)
“Affiliate” means any person who, other than by means of a franchise, controls,
is controlled by or is under common control with any other person.

(2)
“Company operated station” means a motor fuel service station operated by a
franchisor with employees of the franchisor or by a commission manager of the
franchisor for the sale of motor fuel to the general public for ultimate
consumption.

(3)
“Contract” means any oral or written agreement. For supply purposes, delivery
levels during the same month of the previous year shall be prima facie evidence
of an agreement to deliver such levels.

(4)
“Control” means the direct or indirect ownership of or the right to exercise a
directing influence over more than 50 percent of the beneficial interest in any
person.

(5)(a)
“Franchise” means any contract:

(A)
Between a refiner and a motor fuel distributor;

(B)
Between a refiner and a motor fuel retailer;

(C)
Between a motor fuel distributor and another motor fuel distributor; or

(D)
Between a motor fuel distributor and a motor fuel retailer,

under
which a refiner or motor fuel distributor authorizes or permits a motor fuel
retailer or motor fuel distributor to use, in connection with the sale,
consignment or distribution of motor fuel, a trademark which is owned or
controlled by such refiner or motor fuel distributor or by a refiner which
supplies motor fuel to the motor fuel distributor which authorizes or permits
such use.

(b)
“Franchise” includes:

(A)
Any contract under which a motor fuel retailer or motor fuel distributor is
authorized or permitted to occupy leased marketing premises, to be employed in
connection with the sale, consignment or distribution of motor fuel under a
trademark which is owned or controlled by such refiner or motor fuel
distributor or by a refiner which supplies motor fuel to the motor fuel
distributor which authorizes or permits such occupancy;

(B)
Any contract pertaining to the supply of motor fuel which is to be sold,
consigned or distributed under a trademark owned or controlled by a refiner or
motor fuel distributor or under a contract which has existed continuously since
May 15, 1973, and pursuant to which, on May 15, 1973, motor fuel was sold,
consigned or distributed under a trademark owned and controlled on such date by
a refiner or motor fuel distributor; and

(C)
The unexpired portion of any franchise, as defined in this paragraph, which is
transferred or assigned as authorized by the provisions of such franchise or by
any applicable provisions of law which permits such transfer or assignment
without regard to any provision of the franchise.

(6)
“Franchise relationship” means the respective motor fuel marketing or
distribution obligations and responsibilities of a franchisor and a franchisee
which result from the marketing of motor fuel under a franchise.

(7)
“Franchisee” means a motor fuel retailer or motor fuel distributor who is
authorized or permitted under a franchise to use a trademark in connection with
the sale, consignment or distribution of motor fuel.

(8)
“Franchisor” means a refiner or motor fuel distributor who, under a franchise,
authorizes or permits a retailer or motor fuel distributor to use a trademark
in connection with the sale, consignment or distribution of motor fuel.

(9)
“Leased marketing premises” means marketing premises owned, leased or in any
way controlled by a franchisor and which the franchisee is authorized or
permitted, under the franchise, to employ in connection with the sale,
consignment or distribution of motor fuel.

(10)
“Marketing premises” means in the case of any franchise, premises which, under
such franchise, are to be employed by the franchisee in connection with the
sale, consignment or distribution of motor fuel.

(11)
“Motor fuel” means gasoline and diesel fuel of a type distributed for use as a
fuel in self-propelled vehicles designed primarily for use on public streets,
roads and highways.

(12)
“Motor fuel distributor” means any person, including any affiliate of such
person, who:

(a)
Purchases motor fuel for sale, consignment or distribution to another; or

(b)
Receives motor fuel on consignment for distribution to the distributor’s own
motor fuel accounts or to accounts of the distributor’s supplier, but shall not
include a person who is an employee of, or merely serves as a common carrier
providing transportation service for, such supplier or who receives motor fuel
on consignment for sale to the general public for ultimate consumption.

(13)
“Motor fuel retailer” means any person who purchases motor fuel for sale to the
general public for ultimate consumption.

(14)
“Refiner” means any person engaged in the refining of crude oil to produce
motor fuel, and includes any affiliate of such person. [1987 c.917 §1]

650.205
Prohibited conduct by franchisor. Notwithstanding the terms of any
franchise, a franchisor shall not:

(2)
Alter the franchise premises during the effective term of the franchise without
the consent of the franchisee. This subsection does not apply to alterations
required by law;

(3)
Interfere with any franchisee’s right to assistance of counsel on any matter or
to join or be active in any trade association;

(4)
Set or compel, directly or indirectly, the retail price at which the franchisee
sells motor fuel or other products; and

(5)(a)
With respect to credit cards issued by the franchisor, chargeback any credit
card invoice to a motor fuel franchisee unless the franchisor provides the
cardholder’s last-known address, the reason for chargeback, a refund or credit
for any credit card handling fee collected on the transaction by the franchisor
from the franchisee, and the original invoice of the credit card charge or the
legal equivalent if the franchisor has previously received the invoice or a
copy thereof. The cardholder’s address need not be provided if the chargeback
is based on any alleged unlawful, fraudulent or deceptive act of the franchisee
or an employee of the franchisee, or if the cardholder claims no legal
responsibility for payment of the charge because it involved the unauthorized
use of a credit card.

(b)
The terms and conditions governing a motor fuel franchisee’s acceptance of a
franchisor issued credit card, including the reasons for which a chargeback may
be made, shall be established in writing and a copy thereof provided to the
franchisee. The franchisor or its agent shall provide at least 30 days’ prior
written notice to a franchisee before implementing any change to previously
disclosed terms and conditions if such change may increase the franchisee’s
cost of accepting the franchisor issued credit card or if such change adds to
or amends the reasons for which a chargeback may occur.

(c)
No credit card invoice for a franchisor issued credit card shall be charged
back after 90-days from the date a charge invoice was submitted to the
franchisor, except that a chargeback may be made beyond the 90-day period if
the cardholder or franchisor alleges fraudulent or other unlawful actions by
the franchisee or an employee thereof in making the sale, or if the cardholder
refuses payment to the franchisor pursuant to rights granted under §170 of the
Federal Truth-in-Lending Act (15 U.S.C. 1666i), or any rule issued under §5 of
the Federal Trade Commission Act (15 U.S.C. 46), unless the cardholder’s
refusal to pay is the fault of the franchisor. [1987 c.917 §5]

650.210
Rights and prohibitions governing relationship between franchisor and
franchisee.
Without limiting the other provisions of ORS 650.200 to 650.250, the following
specific rights and prohibitions shall govern the relationship between the
franchisor and the franchisee. It shall be unlawful and a violation of ORS
650.200 to 650.250 for any franchisor to:

(1)
Require a franchisee to purchase or lease goods or services of a franchisor or
from approved sources of supply unless and to the extent that the franchisor
satisfies the burden of proving that such restrictive purchasing agreements are
reasonably necessary for a lawful purpose justified on business grounds, and do
not substantially affect competition. This subsection does not apply to the
initial inventory of the franchise. A determination of whether such restrictive
purchasing agreements are reasonably necessary for a lawful purpose justified
on business grounds and do not substantially affect competition shall be guided
by the decisions of the courts of the United States in interpreting and
applying the antitrust laws of the United States.

(2)
Sell, rent or offer to sell or rent to a franchisee any product, service or
property at a price not set in good faith as defined in ORS 71.2010 (2)(t).

(3)
Require a franchisee to assent to a release, assignment, novation or waiver
which would relieve any person from liability imposed by ORS 650.200 to
650.250.

(4)
Refuse to renew a franchise without fairly compensating the franchisee for the
fair market value at the time of expiration of the franchise of the franchisee’s
resalable inventory, supplies, equipment and furnishings purchased from the
franchisor, not including personalized materials that have no value to the
franchisor and inventory, supplies, equipment and furnishings not reasonably
required in the conduct of the franchise business. A franchisor may offset
against amounts owed to a franchisee under this subsection any amounts owed by
such franchisee to the franchisor.

(5)
Impose on a franchisee by contract, rule or regulation, whether written or
oral, any standard of conduct unless the person so doing can sustain the burden
of proving the standard of conduct to be reasonable. [1987 c.917 §9; 2009 c.181
§107]

650.215
Prohibited conduct in offer, sale or purchase of franchise. It is unlawful
for any person in connection with the offer, sale or purchase of any franchise
directly or indirectly:

(1)
To sell or offer to sell a franchise in this state by means of any written or
oral communication which includes an untrue statement of a material fact.

(2)
To employ any device, scheme or artifice to defraud.

(3)
To engage in any act, practice or course of business which operates or would
operate as a fraud or deceit upon any person. [1987 c.917 §10]

650.220
Consent of franchisor to sale, assignment or transfer of franchise; conditions
for trial franchise.
(1) Notwithstanding the terms of any franchise, a franchisor shall not prohibit
or unreasonably withhold its consent to any sale, assignment or other transfer
of the franchise by a franchisee to a qualified third party.

(2)
If the franchisor consents to the proposed sale, assignment or other transfer
and the proposed third party has not previously been a party to a franchise
with the franchisor, the franchisor at its option may require the third party
to accept in lieu of the assigned franchise a trial franchise as defined in The
Petroleum Marketing Practices Act, (15 U.S.C. 2803), on the terms and
conditions then generally being extended by the franchisor to similarly
situated franchisees. Entry into the trial franchise shall terminate the
franchise proposed to be sold, assigned or transferred. [1987 c.917 §2]

650.225
Death of franchisee; when franchisor required to enter into new franchise with
designee of franchisee; notice; qualifications; possession of franchise
premises.
(1) Following the death of a motor fuel retailer franchisee and notwithstanding
the terms of the franchise, the franchisor, in the case of leased marketing
premises, shall enter into a new franchise with the designee of the motor fuel
retailer franchisee on the terms and conditions then generally being extended
by the franchisor to similarly situated motor fuel retailers if:

(a)
Prior to the death of a motor fuel retailer franchisee, the motor fuel retailer
franchisee notifies the franchisor in writing of the designee, who shall be the
surviving spouse, adult child, or adult stepchild of the motor fuel retailer
franchisee or in the absence of a designation, the motor fuel retailer
franchisee’s surviving spouse, if any;

(b)
At the time of the motor fuel retailer franchisee’s death, the designee meets
the qualifications then being required by the franchisor for its motor fuel
retailer franchisees; and

(c)
Within 10 days following the motor fuel retailer franchisee’s death, the
designee enters into a new franchise with the franchisor on the terms and
conditions then generally being extended by the franchisor to similarly
situated motor fuel retailer franchisees, except that for the part of the term
of the new lease equal to the unexpired portion of decedent franchisee’s prior
lease, the rent shall be the same as under the prior lease.

(2)
Until the designee enters into a new franchise as provided in subsection (1) of
this section, the franchisor shall be entitled to possess and to operate the
marketing premises for the franchisor’s own account. [1987 c.917 §3]

650.230
Transfer of franchise to corporation in which franchisee has controlling
interest; conditions.
Notwithstanding the terms of any franchise, no franchisor may prohibit or
prevent the sale, assignment or other transfer of a franchise to a corporation
in which the franchisee has and maintains a controlling interest if the
franchisee offers in writing personally to guarantee the performance of the
obligations under the franchise. In the event of a sale, assignment or transfer
under this section, the franchisor may require the corporation to assume in
writing all of the franchisee’s obligations to the franchisor under the
franchise and may require the franchisee to maintain a controlling interest in
the corporation and actively operate the marketing premises during the time
that the franchise with the corporation continues. [1987 c.917 §4]

650.235
Franchisor prohibited from requiring operation of service station in excess of
16 hours per day; exceptions. (1) A franchisor, as a condition for
renewal of a franchisee lease or a supply agreement, shall not require a
franchisee to operate a service station for the sale of motor fuel to the
public for ultimate consumption in excess of 16 hours per day.

(2)
This section shall not apply:

(a)
If specific hours of business or operation are required under the franchisor’s
prime lease or license from any governmental entity, airport, parking, marine
or port authority, shopping center or any private investor not affiliated with
or controlled by the franchisor;

(b)
If the service station is located within one-fourth mile of access to any
limited access highway of the federal highway system;

(c)
To hours of operation exceeding 16 hours per day that have been agreed upon by
the franchisor and the franchisee; or

(d)
If the franchisor uniformly requires a 24-hour operation by all of its
franchisees. [1987 c.917 §7]

650.240
When transfer of motor fuel a sale in commerce. For purposes of
ORS 646.040, the transfer of motor fuel from a franchisor to a company operated
station or a franchisee shall be a sale in commerce. [1987 c.917 §6]

650.245
Principle of good faith. Without limiting the other provisions of ORS
650.200 to 650.250, the principle of good faith shall govern the relationship
and dealings of the parties with each other. [1987 c.917 §8]

650.250
Injunctive relief or damages; limitation on commencement of action; attorney
fees.
(1) Any person who is injured in the person’s business or property by reason of
a violation of ORS 650.200 to 650.250 may sue therefor in any court having
jurisdiction in the county where the defendant resides or is found, or any
agent resides or is found, or where service may be obtained, for injunctive
relief or to recover the damages sustained by the person. Any action brought
pursuant to this section shall be commenced within four years after the cause
of action accrued. Except as provided in subsection (2) of this section, the
court may award reasonable attorney fees to the prevailing party in an action
under this section.

(2)
The court may not award attorney fees to a prevailing defendant under the
provisions of subsection (1) of this section if the action under this section
is maintained as a class action pursuant to ORCP 32. [1987 c.917 §11; 1995
c.696 §42]

RECREATIONAL
VEHICLE FRANCHISES

650.300
Definitions for ORS 650.300 to 650.480. As used in ORS 650.300 to 650.480:

(1)
“Area of sales responsibility” means the geographic area for which a grantor
has granted a dealer the exclusive right to sell recreational vehicles
manufactured or distributed by the grantor.

(2)
“Camper” has the meaning given that term in ORS 801.180.

(3)
“Consumer” means a purchaser or lessee, other than for purposes of resale, of a
product.

(4)
“Dealer” means a person that:

(a)
Is certified under ORS 822.020 as a vehicle dealer in this state; and

(b)
Sells or leases recreational vehicles to the motoring public in this state.

(5)
“Dealership agreement” means a written agreement pursuant to which a grantor
grants a dealer the right:

(a)
To sell or lease recreational vehicles or recreational vehicle services offered
by the grantor; or

(b)
To use a trade name, trademark, service mark, logo or other commercial symbol
in the sale or distribution of recreational vehicles offered by the grantor.

(6)
“Distributor” means a person that purchases new recreational vehicles for
resale to a dealer.

(7)
“Family” means:

(a)
A parent, sibling, spouse, child, nephew, niece or grandchild of a dealer if
the dealer is an individual; or

(b)
The spouse of the dealer’s parent, sibling, child, nephew, niece or grandchild.

(8)
“Fifth wheel hitch” has the meaning given that term in ORS 801.275.

(9)
“Grantor” means a manufacturer or distributor of recreational vehicles.

(10)
“Line make” means new recreational vehicles that:

(a)
A grantor or dealer offers for sale, lease or distribution under the grantor’s
trade name, trademark, service mark, logo or other commercial symbol;

(b)
Are intended for sale or lease to a specific segment of the motoring public
based upon the vehicles’ decor, equipment, features, price, size and weight;

(c)
Have bodies, chassis and frames that, in the view of the motoring public, place
the recreational vehicles in the same distinct class of recreational vehicle;

(d)
Have lengths and interior floor plans that distinguish the recreational
vehicles from recreational vehicles with substantially the same decor,
equipment, features, price and weight; and

(e)
A dealership agreement authorizes a dealer to sell or lease.

(11)
“Manufacturer” means a person engaged in the manufacture of new recreational
vehicles.

(12)
“Motor home” has the meaning given that term in ORS 801.350.

(13)
“Net invoice cost” means the price a dealer paid for a product, less any rebate
or discount, plus taxes the dealer paid on the product and any sums the dealer
paid to transport the product to the dealer.

(14)
“Product” means a recreational vehicle or an accessory, part, equipment,
machine, tool or sign of or for a recreational vehicle.

(15)
“Proprietary part or accessory” means a part or accessory of or for a
recreational vehicle manufactured by or for a grantor and sold to dealers only
by the grantor.

(16)
“Recreational vehicle” means a vehicle with or without motive power that is
designed for human occupancy and to be used temporarily for recreational,
seasonal or emergency purposes, including but not limited to a travel trailer,
trailer towed with a fifth wheel hitch, camper, camping trailer, fold-up
camping trailer, pop-up, tent camper, truck camper and motor home. “Recreational
vehicle” does not include a bus as defined in ORS 184.675 with a chassis length
of not less than 35 feet that has been converted into a motor coach.

(17)
“Travel trailer” has the meaning given that term in ORS 801.565.

(18)
“Warrantor” means a person that makes a warranty.

(19)
“Warranty” means a warranty made to a consumer for a new product, without
charge, that is not negotiated or separated from the sale of the product and is
incidental to the sale of the product, and that guarantees indemnity for
defective parts, mechanical or electrical breakdown, labor or other remedial
measures such as repair or replacement. “Warranty” does not include a service
contract, insurance or extended warranty sold for separate consideration by a
dealer or other person not under the control of a manufacturer. [2003 c.377 §1]

650.310
Good cause; determination. When determining whether good cause exists for an
action, a person shall consider:

(1)
Concerning the dealer affected by the action:

(a)
The extent of the dealer’s sales and leases of recreational vehicles in the
area of sales responsibility;

(b)
The nature and extent of the dealer’s investment in the dealer’s business;

(c)
Whether the dealer’s service facilities, equipment, parts, supplies and
personnel are adequate to carry out the responsibilities assigned to the dealer
in the dealership agreement;

(d)
The extent and quality of the warranty service performed by the dealer; and

(e)
The extent to which the dealer performed the obligations imposed by the
dealership agreement.

(2)
The economic effect the action may have on communities located within the
affected dealer’s area of sales responsibility. [2003 c.377 §2]

650.320
Dealership agreement.
(1) A dealership agreement shall:

(a)
Contain a provision that the law of this state governs the agreement;

(b)
Assign the dealer an area of sales responsibility;

(c)
If the dealer is an individual, include the designation of a member of the
dealer’s family to succeed to the dealer’s interests in the dealer’s business
and dealership agreement upon the dealer’s death, incapacity or retirement; and

(d)
Inform the dealer of the dealer’s obligations:

(A)
To perform warranty service;

(B)
To prepare products for delivery to the consumer; and

(C)
To deliver products to the consumer.

(2)
Upon a dealer’s request, a grantor shall reconsider the scope of the dealer’s
area of sales responsibility once a year.

(3)
During the term of a dealership agreement, a grantor may not:

(a)
Change the dealer’s area of sales responsibility; or

(b)
Authorize another dealer to sell or lease the same line make in the area of sales
responsibility.

(4)
Subsection (3)(b) of this section does not apply if:

(a)
Good cause exists to authorize another dealer in the same area of sales
responsibility; and

(b)
The area of sales responsibility will support the existing dealer and the new
dealer. [2003 c.377 §3]

650.330
Comparable terms and conditions; grantor sales to public. (1) As used in
this section, “terms and conditions” includes rebates, discounts or any other
program that may affect the ultimate price of a product.

(2)
If dealers compete for the sale or lease of recreational vehicles to the
motoring public, a grantor shall offer to sell products to the dealers at the
same prices and on the same terms and conditions.

(3)
A grantor may not sell a recreational vehicle to the motoring public. [2003
c.377 §4]

650.340
Termination, cancellation or failure to renew; notice; grounds. (1) Without
good cause, a grantor may not:

(a)
Terminate, cancel or fail to renew a dealership agreement.

(b)
During the term of a dealership agreement, take an action that has a
substantial adverse effect on a dealer’s ability to sell or lease recreational
vehicles, including changing the dealer’s area of sales responsibility.

(2)
A grantor shall give a dealer at least 120 days’ written notice of termination
or cancellation of or failure to renew the dealer’s dealership agreement.

(3)
In a notice of termination, cancellation or failure to renew, the grantor shall
state:

(a)
The reasons for the termination, cancellation or failure to renew;

(b)
That the dealer has 30 days from the dealer’s receipt of the notice to notify
the grantor in writing of the dealer’s intent to cure any deficiencies that
formed the basis for the termination, cancellation or failure to renew;

(c)
That, if the dealer notifies the grantor as provided in paragraph (b) of this
subsection, the dealer has 120 days from the dealer’s receipt of the notice of
termination, cancellation or failure to renew within which to cure the
deficiencies;

(d)
That, upon a written request by the dealer showing good cause for an extension
of the 120-day period, the grantor may give the dealer up to an additional 60
days within which to cure the deficiencies; and

(e)
That, if the dealer cures the deficiencies, the grantor will rescind the notice
of termination, cancellation or failure to renew.

(4)
If a dealer that notifies a grantor of the dealer’s intent to cure the
deficiencies on which a grantor based a termination, cancellation or failure to
renew cures the deficiencies within the time prescribed by the grantor, the
grantor shall rescind the notice of termination, cancellation or failure to
renew.

(5)
Subsections (2) to (4) of this section do not apply if the reason for the
termination, cancellation or failure to renew is the dealer’s bankruptcy,
insolvency or assignment of assets for the benefit of creditors.

(6)
Notwithstanding subsection (2) of this section, a termination or cancellation
of or failure to renew a dealership agreement:

(a)
Takes effect 30 days after the dealer receives notice of termination,
cancellation or failure to renew and the grounds for termination, cancellation
or failure to renew is:

(A)
A felony conviction of the dealer or a principal owner of the dealer;

(B)
The closing of the dealership for 10 consecutive business days, except if the
closing is due to:

(i)
An act of God;

(ii)
A strike, lockout or other labor dispute;

(iii)
A scheduled seasonal or holiday closing; or

(iv)
A cause over which the dealer has no control; or

(C)
Suspension or revocation of or failure to renew the dealer’s certificate under
ORS 822.020.

(b)
Takes effect 31 days after the dealer receives the notice of termination,
cancellation or failure to renew if:

(A)
The dealer did not notify the grantor as provided in subsection (3)(b) of this
section; and

(B)
On the 31st day after receiving the notice of termination, cancellation or
failure to renew, the dealer does not possess new recreational vehicles from
the grantor that the dealer has not sold or leased to a consumer.

(7)
A dealer may cancel a dealership agreement by giving 30 days’ written notice of
cancellation to the grantor. [2003 c.377 §5]

650.350
Dealer’s rights upon termination, cancellation or failure to renew. (1) Upon the
termination or cancellation of or failure to renew a dealership agreement by
the grantor, the grantor shall, at the dealer’s request and within 30 days of
the termination, cancellation or failure to renew, purchase from the dealer:

(a)
All new recreational vehicles that the dealer purchased from the grantor within
12 months prior to the effective date of the termination, cancellation or
failure to renew and for which a consumer has not obtained a title as defined
in ORS 801.526;

(b)
If accompanied by the original invoice, all current and undamaged proprietary
parts and accessories that the dealer purchased from the grantor within 120
days prior to the effective date of the termination, cancellation or failure to
renew; and

(c)
All functioning equipment, machines and tools and all current signs that the dealer
purchased from the grantor at the grantor’s request in the five years before
termination, cancellation or failure to renew and that cannot continue to be
used in the normal course of the dealer’s business.

(2)
Subsection (1)(a) of this section does not apply to a recreational vehicle
that:

(a)
The dealer has sold or leased to a consumer or that has been used for more than
demonstration or materially altered; or

(b)
Has been damaged to the extent requiring disclosure to a consumer under ORS
650.420.

(3)
For the purposes of subsection (1)(a) of this section:

(a)
If a new recreational vehicle has not been damaged, the sum due for the
recreational vehicle is the net invoice cost.

(b)
If a new recreational vehicle has been damaged but less than to the extent
requiring disclosure to a consumer under ORS 650.420, the sum due for the
recreational vehicle is the net invoice cost less the cost to repair the
vehicle.

(4)
The sum due for a proprietary part or accessory under subsection (1)(b) of this
section is 105 percent of the net invoice cost plus the cost to the dealer to
transport the part or accessory to the grantor.

(5)
The sum due for equipment, machines, tools and signs under subsection (1)(c) of
this section is the net invoice cost of the equipment, machines, tools and
signs.

(6)
A grantor shall pay a dealer the sum due in full within 30 days of receiving a
product from a dealer under this section. [2003 c.377 §6; 2005 c.47 §1]

650.360
Coercion prohibited.
(1) As used in this section, “coerce” includes threatening to terminate, cancel
or fail to renew a dealership agreement without good cause.

(2)
A grantor may not coerce, or attempt to coerce, a dealer:

(a)
To purchase a product that the dealer did not order;

(b)
To enter into an agreement with the grantor; or

(c)
To take any action that is unfair to the dealer.

(3)
A grantor may not require a dealer to enter into an agreement that requires the
dealer to submit to binding arbitration. [2003 c.377 §7]

650.370
Transfer by dealer.
(1) A dealer shall give a grantor 30 days’ notice in writing before the dealer
transfers an interest in a dealership agreement or ownership of a business that
is the subject of a dealership agreement.

(2)
The dealer shall include in a notice under this section the identity, financial
ability and qualifications of the proposed transferee and any other information
required by the dealership agreement.

(3)(a)
The dealer may not transfer the business to the transferee if a grantor, within
30 days after receiving the dealer’s notice, notifies the dealer that the
grantor has reasonable grounds to object to the proposed transferee.

(b)
If the grantor does not notify the dealer as provided in this subsection, the
grantor shall accept the transfer.

(c)
As used in this subsection, “reasonable grounds to object” includes, but is not
limited to, a proposed transferee’s conviction of a felony or a lack of
creditworthiness or experience to operate the business. [2003 c.377 §8]

650.380
Dealer’s successor.
(1) A grantor shall permit a dealer who is an individual to change the dealer’s
designation of a member of the dealer’s family to succeed to the dealer’s
interest in the dealer’s business and dealership agreement.

(2)
Upon the dealer’s death, incapacity or retirement, the grantor shall accept the
transfer of the dealer’s interest in the dealer’s business and dealership
agreement to the member of the family designated by the dealer.

(3)
Subsection (2) of this section does not apply if the grantor notifies the
designated family member that the grantor has reasonable grounds to object to
the designated family member.

(4)
As used in this section and ORS 650.370, “reasonable grounds to object”
includes, but is not limited to, the designated family member’s conviction of a
felony or a lack of creditworthiness, experience to operate the business or
licenses or certificates necessary to operate the business.

(5)
A designated family member’s right to succeed to the dealer’s interest in the
dealer’s business and dealership agreement does not include the right to
relocate the dealer’s business or change the terms of the dealership agreement.
[2003 c.377 §9]

650.390
Dealer compensation for warranty service; disapproval of warranty service
claims; recall notice requirements. (1) A warrantor shall, for a warranty
provided by the warrantor:

(a)
Provide reasonable compensation to a dealer for diagnostic and repair services;

(A)
The compensation that the warrantor will pay the dealer to perform warranty
service; and

(B)
The time period that the warrantor will allow the dealer to perform warranty
service;

(d)
Reimburse the dealer in an amount equal to 130 percent of the dealer’s cost of
warranty parts, plus the dealer’s shipping expense to return warranty parts to
the supplier of the parts, where “warranty parts” includes parts for which a
parts supplier provides a separate warranty directly to a consumer and where “cost”
means not less than the same price a dealer pays to a warrantor or supplier for
the same part when purchased for a nonwarranty repair;

(e)
Approve or disapprove a dealer’s warranty service claim within 30 days of the
dealer’s submission of the claim to the warrantor; and

(f)
Fulfill all warranty obligations.

(2)
In determining the dealer’s compensation for warranty service, the warrantor
shall:

(a)
Consider the prevailing rate for labor charged by other dealers in the
communities served by the dealer’s area of sales responsibility; and

(b)
Pay the dealer a rate for labor that is not less than the reasonable rate the
dealer charges to consumers for nonwarranty service.

(3)
A dealer shall submit a warranty service claim to the warrantor within 30 days
of the dealer’s completion of the warranty service.

(4)
A dealer shall notify the warrantor if the dealer is unable to perform a
warranty service.

(5)
If the warrantor approves a dealer’s warranty service claim or fails to disapprove
the claim within 30 days after submission, the warrantor shall pay the warranty
service claim within 45 days of the submission of the claim.

(6)
A warrantor may not disapprove a dealer’s warranty service claim without good
cause.

(7)
A warrantor may disapprove a dealer’s warranty service claim if the dealer:

(a)
Failed to comply in a material respect with the warrantor’s written policies
and procedures for the performance of warranty service;

(b)
Failed to properly account for the dealer’s warranty service; or

(c)
Misrepresented warranty service performed or parts used.

(8)
If a warrantor disapproves a dealer’s claim for a defective part on the basis
that the part is not defective, the warrantor may:

(a)
Return the part to the dealer at the warrantor’s expense; or

(b)
Pay the dealer not less than the same price the dealer pays to a warrantor or
supplier for the part when purchased for a nonwarranty repair.

(9)
A warrantor that issues a recall shall include in a recall notice to dealers
and owners of new recreational vehicles the date by which the warrantor expects
to make available to dealers parts and equipment necessary to correct the
defects for which the warrantor issued the recall. The warrantor shall
compensate dealers for repairs that dealers make to correct the defects.

(10)
A grantor or warrantor may not:

(a)
Misrepresent a dealer’s obligation to perform or pay for warranty service; or

(b)
Require a dealer to provide a warranty to a consumer for a recreational vehicle
or other product.

(11)
A warrantor may audit a dealer’s records of a claim for warranty service for a
period of one year from the date the dealer submitted the claim. If, during an
audit, the warrantor discovers a fraudulent claim, the warrantor may extend the
audit period for up to one additional year. [2003 c.377 §10; 2007 c.653 §2]

650.400
Recalls.
(1) A grantor or warrantor shall:

(a)
Assume the liability imposed upon a dealer because of defects in products the
grantor or warrantor supplied to the dealer; and

(b)
Notify a dealer of:

(A)
A recall of a product.

(B)
The dates by which parts and equipment, including tires and chassis and parts
of chassis, will be available to remedy defects.

(2)
If a grantor or warrantor notifies a consumer of a recall of a product, the
grantor or warrantor shall inform the consumer of the dates on which parts and
equipment, including tires and chassis and parts of chassis, will be available
to remedy defects.

(3)(a)
If a grantor provides parts to a dealer to perform services pursuant to the
grantor’s recall of a product, after the dealer performs the services, the
dealer may return, and the grantor shall accept, unused parts in excess of the
dealer’s needs.

(b)
If a dealer returns parts under this subsection, the grantor shall credit the
dealer’s account with the cost of the parts.

(4)
If a warrantor provides parts to a dealer to perform services pursuant to the
warrantor’s recall of a product, after the dealer performs the services, the
dealer may return, and the warrantor shall accept, unused parts in excess of
the dealer’s needs. [2003 c.377 §11]

650.410
Dealer’s warranty obligations. (1) A dealer shall:

(a)
Perform warranty service in a timely and competent manner on a recreational
vehicle that the dealer did not sell or lease if:

(A)
The vehicle is of the same line make the dealer offers; and

(B)
The grantor or warrantor has agreed to compensate the dealer for performing the
warranty service; and

(b)
Complete all predelivery inspections required by the dealership agreement.

(2)
A dealer may not intentionally misrepresent the terms of a warranty. [2003
c.377 §12]

650.420
Required disclosures.
(1) Before delivering a new recreational vehicle to a dealer, the grantor shall
notify the dealer of:

(a)
Uncorrected damage to the vehicle.

(b)
Corrected damage that exceeded six percent of the net invoice cost of the
vehicle to the dealer.

(2)
Before selling or leasing a new recreational vehicle to a consumer, the dealer
shall:

(a)
Disclose to the consumer any structural damage to the recreational vehicle; and

(b)
Obtain the consumer’s written acknowledgment of the disclosure.

(3)
Subsections (1) and (2) of this section do not apply if the damage is to the
following components and the grantor or dealer has replaced the components with
substantially identical components:

(a)
Audio equipment.

(b)
Appliances.

(c)
Bumpers.

(d)
Decorations.

(e)
Furniture.

(f)
Glass.

(g)
In-dash components.

(h)
Instrument panels.

(i)
Paint.

(j)
Tires.

(k)
Video equipment.

(L)
Wheels.

(4)
If a grantor selects the carrier to deliver a recreational vehicle to a dealer,
the grantor must compensate the dealer for the dealer’s cost of repairing
damage to the recreational vehicle caused by the carrier. [2003 c.377 §13]

650.430
Damaged or defective vehicles. (1) Within three days of receiving a
damaged or defective recreational vehicle from the grantor, the dealer shall:

(a)
Notify the grantor in writing of the damage or defect; and

(b)(A)
Ask the grantor to permit the dealer to repair the damage or correct the defect
at the expense of the grantor; or

(B)
Reject the vehicle.

(2)
A dealer may reject a vehicle if, within 10 days of receiving the dealer’s
notice, the grantor does not permit a dealer to repair the damage or correct
the defect at the grantor’s expense.

(3)
If a dealer rejects a vehicle, the grantor must repurchase the vehicle within
10 business days. The repurchase price shall include the costs of delivery and
financing necessary to keep the vehicle in stock.

(4)
Rejection of a vehicle releases the dealer from any obligation to the grantor
to pay for the vehicle.

(5)
A dealership agreement may extend the term by which a dealer must notify the
grantor of a damaged or defective vehicle. [2003 c.377 §14]

650.440
Grantor’s ownership, operation or control of dealership. (1) A grantor
may not sell a recreational vehicle to or through a dealer without having
entered into a dealership agreement with the dealer.

(2)
A grantor may not own, operate or control a dealership in this state.

(3)
Notwithstanding subsection (2) of this section, a grantor may own, operate or
control a dealership in this state if:

(a)(A)
The ownership, operation or control does not exceed a period of one year or, if
the grantor can show good cause, two years; and

(B)
The dealership is for sale at a reasonable price and under reasonable terms and
conditions;

(b)
The grantor has entered into a bona fide agreement with a person who, under the
dealership agreement:

(A)
Must make a significant investment, subject to loss, in the dealership; and

(B)
May reasonably expect to acquire the dealership in a reasonable time and under
reasonable terms and conditions; or

(c)
The grantor owned, operated or controlled the dealership on January 1, 2003. [2003
c.377 §15]

(a)
A grantor shall indemnify a dealer against and hold the dealer harmless from
any cost, loss or damage, including attorney fees, arising out of a claim,
action or judgment based on the grantor’s negligence or intentional misconduct.

(b)
A dealer shall indemnify a grantor against and hold the grantor harmless from
any cost, loss or damage, including attorney fees, arising out of a claim,
action or judgment based on the dealer’s negligence or intentional misconduct.

(2)(a)
A dealer shall notify the grantor of a claim or action that is subject to
subsection (1)(a) of this section within 10 days of the dealer’s receipt of the
claim or service of summons.

(b)
A grantor shall notify the dealer of a claim or action that is subject to
subsection (1)(b) of this section within 10 days of the grantor’s receipt of
the claim or service of summons. [2003 c.377 §16]

650.460
Indemnification; warrantor and dealer. (1) Notwithstanding any agreement to
the contrary:

(a)
A warrantor shall indemnify a dealer against and hold the dealer harmless from
any cost, loss or damage, including attorney fees, arising out of a claim,
action or judgment based on the warrantor’s negligence or intentional
misconduct.

(b)
A dealer shall indemnify a warrantor against and hold the warrantor harmless
from any cost, loss or damage, including attorney fees, arising out of a claim,
action or judgment based on the dealer’s negligence or intentional misconduct.

(2)(a)
A dealer shall notify the warrantor of a claim or action that is subject to
subsection (1)(a) of this section within 10 days of the dealer’s receipt of the
claim or service of summons.

(b)
A warrantor shall notify the dealer of a claim or action that is subject to
subsection (1)(b) of this section within 10 days of the warrantor’s receipt of
the claim or service of summons. [2003 c.377 §17]

650.480
Remedies; warrantor and dealer; attorney fees. (1) A dealer
injured by a warrantor’s violation of ORS 650.390, 650.400, 650.410 or 650.460
may bring a civil action against the warrantor to recover the dealer’s actual
damages.

(2)
A warrantor injured by a dealer’s violation of ORS 650.410 or 650.460 may bring
a civil action against the dealer to recover the warrantor’s actual damages.

(3)
The court shall award reasonable attorney fees to the prevailing party in an
action under this section. [2003 c.377 §19]